Here’s Why Waymo Is Partnering with Avis

Pete Bigelow

Jun 27, 2017

Waymo

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For a while now, the future of rental-car companies has appeared bleak. Whether because arriving passengers are opting for Uber at airports or because younger drivers prefer car-sharing services that offer hourly rates, traditional rental-car companies have been battered by the ongoing shift in the way people move around. Stock prices have followed: Hertz has seen share prices decline by nearly half since the start of the year, while Avis has lost more than half its value over the past three years.

What rental-car companies have retained through that tumult, however, is an expertise in maintaining large fleets of vehicles. That may offer a path forward.

On Monday, Avis announced it has reached an agreement with Waymo, the self-driving-technology company spun out from Google late last year, in which Avis will offer fleet support and maintenance services to Waymo’s autonomous vehicles.

The collaboration will begin in Phoenix, where Waymo is already operating 100 Chrysler Pacifica hybrid minivans as part of a pilot project that puts these vehicles in the hands of ordinary motorists. There are plans for an additional 500 autonomous minivans in the Waymo fleet, and the partnership will ensure these vehicles are ready for motorists to use around the clock.

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This isn’t the first time Avis has attempted to reckon with the changes ahead in travel preferences and modes.

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The timeline for the arrival of the additional vehicles isn’t clear, but with 600 vehicles, Waymo’s autonomous fleet would be the largest in the nation. For a company like Avis, which already has 11,000 locations in 180 countries, such a partnership will help the company learn the specifics of caring for automated vehicles in a single city, and it could portend a boon when self-driving cars are deployed on a widespread scale.

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“Not only does this partnership enable us to leverage our current capabilities and assets, but it also allows us to accelerate our knowledge and hands-on experience in an emerging area as Waymo-enabled self-driving cars become available in the marketplace,” Larry De Shon, president and chief executive officer of Avis Budget Group, said in prepared remarks.

Both companies said the agreement is a “multiyear” collaboration, but terms and a precise time frame were not disclosed. At the outset, Avis will stick to familiar ground. Servicing of the autonomous technology will remain with Waymo. Avis will provide traditional automotive maintenance, including vehicle cleaning, oil changes, tire rotations, and the installation of automotive parts.

This isn’t the first time Avis has attempted to reckon with the changes ahead in travel preferences and modes. In 2013, the company acquired Zipcar, which has more than a million worldwide members and now operates as an Avis subsidiary.

That acquisition demonstrated that the company’s management, at the very least, has considered how rental-car companies might evolve as car-sharing gains popularity. With Monday’s partnership announcement, they may have shown that rental-car companies might still retain a place in the new transportation landscape.